Wow. I don't buy any of those claims listed in the TH article. For example, "Once you install the client, it sets out to locate the MP3s that are on your hard drive, and begins broadcasting the songs across the Internet." - ok, not legal, without a license for "public" broadcasting of that copyrighted material.
"Mercora gets around the issues of other music sharing services like Kazaa and Morpheus because MP3 files do not get transferred across the Internet: it is strictly a real-time streaming service. "We own the end-to-end encoding of the stream so we can ensure its security," said Sampath."
I don't care if they own the IP over the encoding format used, but the data, as streamed, would most likely be considered both a public broadcast as well as a derivative work of the original work.
So, who wants to start the pool, for how long before this service gets "investigated" like that Russian MP3 site, or simply shut down?
Best that I can figure is that this could be legal if they pay for a compulsory radio music broadcast license, but how will they pay the royalties/fees on that, if they are offering the service for free? And based on the terms of that license, can it even be applied to the end-users who are effectively the actual "broadcasters"? I just don't buy that this thing will work out. That Canadian TV streaming site was supposedly legal according to the laws up there too, but it eventually got shut down regardless.
I would be as careful participating in this scheme, as I would if I were theoretically sharing MP3s over the internet with Kazaa. You never know if the RIAA is likewise recording IPs, in case they eventually raid this place too, and then turn around and launch suits against the users whos IPs they logged.